The repeal of President Barack Obama's Patient Protection and Affordable Care Act, which is currently under review by the U.S. Supreme Court, would be a major credit negative for for-profit hospital operators, according to a Moody's Investors Service report.
"If the law is fully or partially repealed, for-profit hospital operators' costs of treating patients unable to pay their bills would rise and would limit operators' revenue growth and profit margins and constrain cash flow," Dean Diaz, a Moody's vice president and senior credit officer, said in a news release. "Bad debt expense already averages over 10 percent of revenue of our rated for-profit hospital operators."
Moody's said the largest acute-care for-profit hospital operators — Nashville, Tenn.-based Hospital Corporation of America, Franklin, Tenn.-based Community Health Systems and Dallas-based Tenet Healthcare — would be hurt the most because they would still have to treat the rising pool of uninsured patients.
Specialty for-profit hospital operators — such as Mechanicsburg, Pa.-based Select Medical Holdings Corporation, Birmingham, Ala.-based HealthSouth Corporation, Louisville, Ky.-based Kindred Healthcare and Franklin, Tenn.-based Acadia Healthcare — would be less affected because they "do not offer emergency room services and see fewer uninsured patients," according to the release.
"If the law is fully or partially repealed, for-profit hospital operators' costs of treating patients unable to pay their bills would rise and would limit operators' revenue growth and profit margins and constrain cash flow," Dean Diaz, a Moody's vice president and senior credit officer, said in a news release. "Bad debt expense already averages over 10 percent of revenue of our rated for-profit hospital operators."
Moody's said the largest acute-care for-profit hospital operators — Nashville, Tenn.-based Hospital Corporation of America, Franklin, Tenn.-based Community Health Systems and Dallas-based Tenet Healthcare — would be hurt the most because they would still have to treat the rising pool of uninsured patients.
Specialty for-profit hospital operators — such as Mechanicsburg, Pa.-based Select Medical Holdings Corporation, Birmingham, Ala.-based HealthSouth Corporation, Louisville, Ky.-based Kindred Healthcare and Franklin, Tenn.-based Acadia Healthcare — would be less affected because they "do not offer emergency room services and see fewer uninsured patients," according to the release.
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